Stocks down slightly

The local stock barometer slipped Monday, bucking a regional upswing, as investors weighed the aftermath of the bombing of a public market in Davao City.

The main-share Philippine Stock Exchange index (PSEi) lost 43.37 points or 0.56 percent to close at 7,764.05. Elsewhere in the region, stock markets were mostly higher as the latest US jobs report tempered expectations that the US Federal Reserve would raise interest rates this month.

At the local market, foreigners were net sellers to the tune of P611 million.

Local stockbrokerage Papa Securities looked at 16 significant terrorist situations from the year 2,000 and have found that markets dropped an average 1 percent after news broke of the attack. In some cases, such as the Rizal Day bombings, the market even declined by more than 3 percent.

“On the other hand, terrorist attacks aren’t a death sentence for the market. On average, there is a short-term decline followed by a recovery to 0.4 percent higher than pre-attack levels,” Papa Securities said in a research note Monday.

“We suspect that there is a tendency for the market to continue its trend after the initial

shock. If history is any gauge, then the index would likely recover to pre-attack levels within a month, as in 63 percent of past cases,” it said.

If terrorist attacks would continue and the 7,500 breaks, Papa Securities said the index might move to its 200-day moving average at 7,250. “The attack in Davao City last week is noteworthy because the market is in a delicate situation. Foreign funds have been selling over the past three weeks and the post-election gains have all but dissipated,” it said. Doris Dumlao-Abadilla